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State Bank of India – Stocks To Watch

admin — Fri, 11 Dec 2009 09:21:22 +0000

State Bank of India (SBI), despite the trying times, has posted a good set of results for the first half ended 30th September 2009. NII grew during H1FY10, grew 3.51% and this was driven mainly by interest on advances but it was muted due to fall in credit deposit ratio. Fee income grew 51.55% and operating income rose 18.03%.
What really helped the performance has been the reduction in the proportion of high-cost bulk deposits, which came down from 16.8% a year ago to 3.6%. Another noteworthy feature is that though PLR, since Sept 08’ has come down by 200 basis till Sep 09’, the yield on advances has fallen by only 29 basis points. This means that the bank has lesser sub-PLR lending.
Advances for HIFY10 grew 16%and deposits grew 25%. Gross NPA was at 2.99% and net NPA was at 1.73%. Interestingly, market share of SBI in advances rose YoY to 16.58% from 15.97%. Its advances to corporates grew 14%, that to SME rose 21%, agri loans grew 21% and home loans showed a healthy and steady rise at 23%. It remains numero uno in the total home loan segment in India.
After launching of SBI Happy Home Loan scheme, monthly average number of loans sanctioned increased from 14,400 in Feb 09 to 22,000 in Sept 09. In H1 FY10 disbursements under Happy Home Loans scheme is Rs 13,290 crore, which account for less than 2.3% of the overall loan book.
Education loans rose 42% and auto loans rose 44%. Market share in Auto loans is around 15% and SBI is the largest player in the industry.
It’s provisioning as at 30th Sept 09’ stood at 42.87% which is lower than 45.15% it had at the end of 30th June 2009. Last month, RBI increased the provision cover to 70% within a year and this means, SBI will have to hike its provisioning, putting pressure on the bottomline.
The good thing going for SBI is the proposed stake sale by the Govt from current 59% to 51%. This will rake in SBI over Rs.12,000 crore. Insurance companies have a 11.23% stake while the FII holding, as at September 30, stood at 9.87%.

Free Day Trading Stock Tips – 22nd Oct 09

admin — Thu, 22 Oct 2009 03:53:53 +0000

SHORT SELL Jaiprakash Associates Stop Loss 267 Target 208

SHORT SELL Suzlon Energy Stop Loss 89 Target 81

SHORT SELL Reliance Capital Stop Loss 925 Target 865

SHORT SELL State Bank of India Stop Loss 2415 Target 2256

Buy GSPL With stop loss of Rs 82 for a target of Rs 99-112

Buy OIL Country with stop loss of Rs 96 for a target of Rs 122-140

Sell ACC Oct Future at Rs 768.45; stop loss Rs 778; Target Rs 753.00

Buy State Bank of India – Daiwa Securities

admin — Mon, 14 Sep 2009 03:42:09 +0000

State Bank of India
Reco Price: Rs 1,813
Current market price: Rs 1,918
Target price: Rs 2,109
Upside: 10%
Brokerage: Daiwa Securities

The broking house believes that one of State Bank of India’s (SBI) biggest advantages is the high interest spread on its bond portfolio. The incremental cost of funds for SBI has fallen by almost 210 bps over the past nine months, whereas the incremental yield on its government-bond portfolio has remained more or less the same. Currently, if SBI buys a 10-year government bond, then it is making an incremental interest spread of 200-250 bps, compared with a negative interest spread six months ago and a positive spread of around 10 bps nine months back.

SBI moved almost Rs 35,000 crore of short-term cash to statutory liquidity ratio (SLR) securities in 1Q FY10, and this is likely to have a positive impact and reflect in the NIM in the latter half of FY10. The re-pricing of high-cost deposits in November-December 2009 would also give the NIM a further boost. SBI has underperformed both the broader and Nifty banking indices over the past six months, but this trend will reverse over the next six months. The six-month target price is revised to Rs 2,109 from Rs 1,043, based on a target PBR of 1.5x on FY10 consolidated BVPS forecast and adding Rs160 per share for the life-insurance venture.